In this article, Patrick Buckingham, a partner in Herbert Smith's Financial Services Regulatory Group, Patricia Horton, a professional support lawyer in that group, and Stephen Gale, a partner in the firm's Restructuring and Insolvency Group, consider the implications of the decision of the High Court in Lehman Brothers International (Europe) v CRC Credit Fund Ltd and others [2009] EWHC 3228 (Ch). This decision represents the most recent statement of the English courts in relation to the treatment of client money, dealing with a range of issues arising under the FSA's client money rules.

This article discusses the main aspects of the decision as well as the key implications for FSA regulated firms and their clients. It also discusses some ways in which clients may wish to mitigate the insolvency risks they would otherwise face where their cash is held by FSA regulated firms as client money.